Rebutting presumed undue influence: was the transaction the result of free and informed thought?

Once a presumption has arisen that a transaction was the result of undue influence, the burden of proof shifts to the person seeking to uphold it. They need to show that the transaction was entered into after full, free and informed thought about it. The fact that independent legal advice was taken may help to meet this burden but will not always be decisive. It is always a question of fact.

In Curtis v Curtis ([2011] EWCA Civ 1602, CA (Eng)) C and his wife transferred their home to a charity that provided spiritual counselling services and a spiritual family. C later parted company with the charity. He sought to have the gift set aside on the basis that it was the result of undue influence. He succeeded at first instance since the necessary elements were present; there was a relationship of trust and influence and a transaction manifestly to the disadvantage of the donor. The presumption had not been rebutted. The charity had not managed to show that the transaction was the fruit of full, free and informed thought about it. Even had C taken independent legal advice that might not have been enough. Nor was it enough to show that C was a mature, intelligent and self-assured person. The Court of Appeal upheld the first instance decision. The judge had taken the right approach and was entitled to reach the conclusions that he had. A defence of laches failed since C had been under the influence of the trust for much of the time between leaving the property and making the claim.

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